The news
The SEC tokenized stock exemption, issued September 17, 2026, lets new Tokenized Securities Venues (TSVs) trade blockchain versions of US-listed shares without registering as exchanges. The order expires five years after publication and caps how many stocks, and how much volume, can trade.
The order, Release No. 34-106402, exempts TSVs from the Securities Exchange Act of 1934's definition of an exchange and exempts certain liquidity providers from the definition of a dealer. Trading runs through automated market makers (AMMs), smart contracts that set prices based on the ratio of assets held in a liquidity pool. Access is limited to permissioned participants, but the smart contracts must be auditable, public and deployed on a public, permissionless ledger. SEC Chairman Paul S. Atkins said the relief supports onchain trading while the Commission weighs further changes.
Limits are tied to the tiers of the Limit Up-Limit Down Plan, the existing volatility framework. For Tier 1, which includes S&P 500 and Russell 1000 stocks, a TSV can trade up to 75 symbols and 0.25% of the prior month's average daily share volume. For Tier 2, the caps are 250 symbols and 2.5%. Venues must halt trading when the underlying stock stops trading and must verify that tokens carry the same dividend, voting and ownership rights as the underlying shares.
Before a TSV lists a token created by a third party unaffiliated with the issuer, it must give the issuing company written notice. Trading cannot start for at least 30 calendar days, and if the issuer objects in writing within that window, the venue cannot list the token. The SEC is seeking public comment on the order under File No. 4-927.
Bond markets are moving too. On September 28, the International Capital Market Association (ICMA) published a discussion paper on smart contracts in fixed income markets built on distributed ledger technology (DLT), shared databases that record transactions across a network, according to Finadium. The paper names repo and collateral management as the most promising near-term uses and says scaling depends on standardized, machine-readable data, legal alignment and consistent transfer of assets across platforms.
On September 29, Broadridge Financial Solutions (BR) named Theo Golden to a newly created role, Head of Tokenized Product, International, based in London and reporting to Mark Nichols, co-president of digital assets, according to Financial IT and FX News Group. Golden was head of digital assets at Baillie Gifford, where he launched BAGEY, which the announcement described as the UK's first fully native tokenized fund. "Tokenization is moving mainstream," Nichols said.
The numbers
- Duration of SEC Innovation Exemption
- Five years after publication
- Tier 1 cap per TSV
- 75 symbols; 0.25% of prior-month average daily share volume
- Tier 2 cap per TSV
- 250 symbols; 2.5% of prior-month average daily share volume
- Issuer notice period before third-party tokens trade
- At least 30 calendar days
- Daily value tokenized on Broadridge's DLR repo platform (company, May 2026)
- More than $365 billion
Why CEOs should care
For boards, general counsels and investor relations teams at listed companies, the practical change is the issuer notice. A venue that wants to list a third-party token of your stock must write to your principal executive office, and you have 30 calendar days to object. The SEC itself cites issuer worries such as keeping the shareholder register accurate and possible price dislocation. Decide now who receives these notices, who has authority to object and what your default position is, so the window does not lapse by accident.
For asset managers and CFOs of funds, the signals point to operations before trading. ICMA sees repo and collateral as the first real uses of smart contracts in bonds, and Broadridge said in May that its Distributed Ledger Repo platform tokenizes more than $365 billion a day. Ask custodians, fund administrators and post-trade providers which tokenized products they can service today, on which ledgers, and how books and records will be reconciled with traditional holdings.
For CISOs and chief risk officers, onchain venues bring code risk into the trading stack. The SEC requires public, auditable smart contracts and synchronized trading halts, but firms participating as liquidity providers or investors should still review contract audits, key custody and how a halt on the primary exchange is enforced onchain.
The bigger picture
The SEC describes its order as an interim, targeted measure, using exemptive authority under Section 36 of the Exchange Act rather than a full rulemaking. It says the volume caps are designed to limit potential disruptions in the wider market for each stock, including prices of tokens drifting away from the traditional shares. SiliconANGLE, in a September 28 report on an industry discussion, framed the exemption as part of a broader push by stablecoins and tokenized assets into traditional finance.
The ICMA paper flags the risk on the other side: fragmentation across institutional DLT networks, and the need for common data standards and settlement assets. Broadridge, which in May 2026 announced a single platform for tokenized and traditional securities, is now adding a senior role focused on tokenized products in its international markets.
What’s next
Watch for the first TSV notices filed with the SEC, the first issuer objections to third-party tokens, and comments submitted under File No. 4-927 that could reshape the caps. In bonds, watch whether ICMA's call for common standards turns into working-group templates, and whether Broadridge's new international role produces tokenized fund or repo launches in international markets.
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